A major coup in the world of business travel. The world's leading business travel agency, American Express Global Business Travel (GBT), is acquiring its competitor CWT, and potentially also its 4,000 customers. This brings together two heavyweights in the business travel sector, and more generally in the world of travel, with estimated revenues of 850 million dollars for CWT in 2024 and almost 2.5 billion for Amex GBT. According to Travel Weekly's 2023 Power List, Amex GBT was the number 3 in the world in sales volume behind Booking and Expedia, while CWT is the fifth largest player, just behind another major TMC, BCD Travel.
The transaction, which is expected to close in the second half of 2024, will involve a combination of shares and cash for a total consideration of approximately $570 million. This represents a valuation of 7.6 times CWT's EBITDA, reduced to 2.5 times EBITDA taking into account synergy interviews over the next three years. In other words, 155 million dollars per year, 80% from efficiency gains through optimisation of combined costs, and 20% from commercial optimisation through harmonisation of contractual conditions with agency suppliers.
While CWT's investment fund shareholders will have approximately 13% of the capital after this merger-acquisition, Patrick Andersen, CWT's CEO, sees in this " joining forces with Amex GBT "a means of accelerating" our vision of a technological future for business travel" . For his part, Paul Abbott, CEO of Amex GBT, stated that CWT's integration into Amex GBT's proven software and services model will offer "the best of both worlds". more choice for customersmore opportunities for employees and more value for shareholders" .
CWT's 4,000 customers will havet access to Amex GBT's proprietary software and servicesThese include Neo and Egencia, as well as solutions for meetings and events and access to the Amex GBT marketplace. Or " the most comprehensive and competitive content in the industry" said the Amex GBT press release.
This acquisition completes a difficult period for CWT, recapitalised in September 2021 then placed under Chapter 11 protection a few weeks later, before being recapitalised and deleveraged again last November. American Express Global Business Travel continues its shopping spree after acquiring publisher KDS and its Neo in 2016, followed by travel agency HRG in 2018 and, finally, in 2021, Egencia Technology TMC and the travel agency Ovation Travelspecialising in the US and UK markets.
